Marijuana Law, Policy, and Authority

Analysis of the Warren-Gardner STATES Act

Posted by on Thursday, June 7, 2018 in News, Updates.

[Update 6/8: I redrafted some of the language below for clarity and conciseness.]

On June 7, Senators Elizabeth Warren (D MA) and Cory Gardner (R CO) formally introduced legislation to eliminate much of the conflict between state and federal marijuana laws. A full copy of the proposed legislation, called the “Strengthening the Tenth Amendment Through Entrusting States Act” (or STATES Act), can be found here.

I’ll briefly summarize the proposed bill (it’s only 6 pages long) and then I’ll offer some reactions to it.

Most notably, the bill would legalize the possession, manufacture, and distribution of marijuana when those activities have been authorized by state (or tribal) law. See STATES Act Section 2 (declaring that the Controlled Substances Act (CSA) “shall not apply to any person acting in compliance with State [or Tribal] law relating to the manufacture, production, possession, distribution, dispensation, administration, or delivery of marihuana.”). In essence, the bill says that if it’s legal under state law, it’s also legal under federal law.

The trust extended to the states by the bill does have two modest limits. First, the legislation would ban the distribution of recreational marijuana to anyone under 21, regardless of whether such sales are permitted by state law. Id. at Section 4. (Currently, all states set the legal age for marijuana at 21.) Second, the STATES Act would also ban the distribution of marijuana at truck stops, again, without regard to how state law treats such sales. Id. at Section 3. (Again, I doubt any state currently allows such sales.)

The STATES Act makes an even more fundamental change to the federal law governing “industrial hemp.” Namely, the bill removes industrial hemp from the definition of marijuana under the CSA. See STATES Act Section 2. As discussed in the book (see pages 21-26), the CSA currently defines marijuana to include all cannabis plants, regardless of their THC content. For purposes of the bill, “industrial hemp” is defined as the “plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” 7 U.S.C. Section 5940(b)(2).

Now let me share four reactions to the STATES Act.

1. The STATES Act would significantly broaden – and solidify – existing federal protections for state licensed marijuana activities.

Congressional spending riders like the Rohrabacher-Blumenauer Amendment (see book pages 353-358) already bar the Department of Justice (DOJ) from enforcing the federal marijuana ban against individuals acting in compliance with state medical marijuana laws. However, the protection afforded by those riders is rather limited.

For one thing, the protection is temporary and revocable–the spending restrictions have to be adopted annually with every new budget, and if they’re not, the DOJ can prosecute marijuana crimes committed while earlier riders were in place (back as far as 5 years, the statute of limitations for federal drug crimes). The STATES Act, by contrast, is permanent (at least until Congress repeals or amends it).

In addition, the spending riders now cover only medical marijuana, whereas the STATES Act also covers recreational marijuana, with the exception for sales to minors (as noted above).

And most importantly, while the spending riders only apply to the DOJ, the STATES Act effectively bars legal claims that might be asserted by a host of other parties, including other federal agencies (think of the Federal Reserve’s disapproval of marijuana banks), state officials (think of preemption claims filed by states), and private parties (think of Civil RICO suits brought by private landowners against marijuana suppliers). The STATES Act would do this by making marijuana legal, at least when a state chooses to do so

To be sure, the STATES Act is less bold than some other proposals that have been floated in Congress, like Cory Booker’s Marijuana Justice Act (MJA). (For my analysis of the MJA, see here and here.) Among other things, the MJA would repeal the federal marijuana prohibition outright–i.e., regardless of what states do. But the latest bill’s more cautious approach should make it more politically viable. As I pointed out here, one key objection to the MJA is that it completely eliminates the federal government’s role in regulating marijuana–an approach I think very few people would embrace. The STATES Act, by contrast, keeps the federal government involved in marijuana regulation (at least to a limited extent), by banning marijuana distribution in the two settings noted above and when otherwise not permitted by state law. I don’t know whether this will be enough to win over those (including yours truly) who think the federal government should play a more prominent role in this field (e.g., in regulating labels and packaging), but it’s a start

Nonetheless, I do see three problems with the approach taken by the STATES Act.

2. The STATES Act has a loophole that could leave many state licensed marijuana suppliers exposed to federal prosecution. 

The protection afforded by the STATES Act hinges upon marijuana suppliers (and users) staying in “compliance with State law.” Spending riders and the (now rescinded) DOJ enforcement guidance have taken a similar approach, tolerating marijuana activities only to the extent they comport with state law. But as I point out in the book (see pages 353-358), this approach could leave state licensed marijuana suppliers (and users) exposed to harsh federal criminals sanctions for committing seemingly minor violations of state law. Imagine, for example, that a supplier is licensed by her state to cultivate 1,000 plants, but she actually keeps 1,001 plants in her warehouse. The state might treat this as a minor violation, perhaps subjecting the supplier to a warning or small fine. But if the STATES Act is interpreted literally, she would now be criminally liable under federal law (after all, she is no longer in “compliance” with state law).  And she might face a 10 year mandatory sentence under the CSA (see book pages 362-370 for sentencing issues), depending on whether she is liable for the 1 errant plant or the entire batch of 1,001. This supplier might also struggle to get banking services. A bank might balk at dealing with her if some of her revenue (even a small part) was derived from (i.e., represents the proceeds of) production activities that violated state (and thus federal) law. I suspect these sorts of issues could arise frequently, given the sheer volume of state regulations; but the STATES Act does not satisfactorily address them, because it fails to provide guidance or flexibility on what “compliance” means.

3. The STATES Act places TOO MUCH trust in the states.

The STATES Act proposes to tie the federal government to the mast of 50 ships being sailed by the states. Indeed, the very title of the bill declares that the federal government “entrusts” the states with responsibility for this important policy domain. But this raises problems for both prohibitionists and reformers alike.

On the one hand, marijuana prohibitionists might worry that states will authorize objectionable marijuana activities–in the process, forcing Congress to do so as well. I lodged this objection against the MJA here. Of course, the MJA repealed the federal ban outright, while the States Act continues to impose some independent federal limits on marijuana activities–e.g., it bans recreational marijuana sales to minors, regardless of state age limits. But a state might approve a variety of other activities that even today’s Congress might not stomach easily–say, permitting sales of marijuana near schools or drastically expanding the range of conditions for which people (including children) could use marijuana medically (and at schools, on the job, etc.). The STATES Act doesn’t leave the federal government any means by which to address such scenarios, other than by passing new federal legislation on an as needed basis.

On the other hand, supporters of legalization might find the proposed bill somewhat hollow. In the press conference announcing the bill (watch here), Senator Warren gave an impassioned plea for legalization of marijuana. Among other things, she claimed “the science is clear, medical marijuana treatments are effective.” She also lamented that federal law was broken and that it “made it harder for veterans to get treatment for chronic pain”, “keep children with rare diseases in agony,” and “make life miserable for individuals struggling with terminal diseases.”

But if prohibition is really so problematic, why not legalize marijuana throughout the nation? The STATES Act doesn’t really do that. It only allows veterans and children with rare diseases and individuals with terminal illnesses access to marijuana if their states tolerate it–in other words, if they live in places like Colorado or Massachusetts, but not Tennessee or Oklahoma. In sum, if Congress really believes marijuana has medical value, they should legalize it independently of what the states do.

4. Finally, the bill leaves a lot of other questions unanswered.

This is a common problem with marijuana reforms (i.e., it’s not unique to the STATES Act). Here are just some of the questions raised but not answered by the bill:

  • Would military personnel be allowed to use marijuana, medically or otherwise?
  • Would employers or landlords have to accommodate medical use of marijuana under the Americans With Disabilities Act (see book pages 655-671)?
  • Could states continue to ban commercial marijuana advertising, given that the constitutionality of such bans has arguably hinged on federal marijuana prohibition (see book pages 501-504)?
  • Would the Food and Drug Administration continue to bar marijuana suppliers from making medical claims regarding the health benefits of their products?

Congress has created a very complicated system for regulating drugs. A 6 page bill (much of it repetitive) only scratches the surface of the reforms that will be necessary to truly align state and federal law.

All three of my concerns (points 2-4 above) could be satisfactorily addressed by more comprehensive federal legislation. Of course, that might be asking too much at the present moment. The STATES Act may be the best deal that Senators Warren and Gardner could broker. And I suspect that many proponents of reform are likely to view the STATES Act as far better than nothing, notwithstanding my concerns.

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4 Comments on “Analysis of the Warren-Gardner STATES Act”

Your reasons for too much trust in the States seem unreasonable to me. You’re looking at it with excessive detail. The States are perfectly capable of taking care of it. Things are going smoothly in states where it has been legalized. All of your concerns could be applied to alcohol use and concerns like your when applied to alcohol have been taken care of by the States.

Tim Cox on June 8th, 2018 at 2:32 pm

Tim: You make a reasonable comparison to alcohol, but I don’t think the comparison really supports your point.

For one thing, the federal government plays a fairly prominent role in setting alcohol policy. Among other things, federal law now regulates production of spirits, imposes excise taxes on most alcoholic beverages, regulates the labeling and advertising thereof, and pressures states (via grants) to maintain the 21 year old minimum drinking age. These sorts of federal regulations arguably help to limit the impact of any objectionable state alcohol policies.

Furthermore, it’s far from clear that giving state (and local) governments control of some aspects of alcohol policy (like retail sales) has been wise, from a broader social point of view. Some state and local policies arguably shift harms onto neighboring jurisdictions or even exacerbate those harms (think of dry counties that make people take longer drives to consume alcohol).

Finally, while you suggest that things are “going smoothly in states where [marijuana] has been legalized,” what about in those states where it continues to be criminally prohibited? Under the STATES Act, you have to be comfortable not only with states legalizing marijuana, but also with states continuing to criminalize it.

mikosra on June 8th, 2018 at 5:48 pm

Thank you for the thoughtful analysis. What are your thoughts on the possibility that contiguous states could authorize product import and export, thus allowing a modest form of interstate commerce? I realize that commerce is within the plenary authority of Congress, but if the STATES Act passes, the power to regulate on this issue appears delegated. I know of at least one state that already permits licensees to import seeds, clones, and cuttings from other “legal” jurisdictions.

Ryan Agnew on June 11th, 2018 at 11:23 am

Thanks Ryan. The STATES Act would make the import / export of marijuana legal under federal law, if those same actions are allowed by state law. (Just to be clear, the importing state would have to approve imports and the exporting state would also have to approve exports by its vendors for the STATES Act to legalize such interstate transactions.) So the STATES Act would open the door for such sales. But I don’t think states would necessarily jump to approve imports. Local suppliers are likely to oppose any such a move, as it would threaten their own sales; and state legislators might want to protect in state suppliers (and the jobs they create) from out-of-state competition. Exports are another matter. Some states might love to sell marijuana to other states (more revenues, jobs, etc.). But it takes two to tango — they’d need to convince other states to allow imports — and some states might worry that exports would boost prices and reduce selection for local consumers. I discuss some of these concerns in any earlier post concerning Minnesota’s medical marijuana law at https://my.vanderbilt.edu/marijuanalaw/2018/02/cases-to-watch-minnesota-prosecuting-two-employees-of-state-licensed-medical-marijuana-supplier/.
You’re correct that some states have authorized the importation of seeds, etc. — but that might be an unavoidable step states need to take to get their industries up and running (i.e., it doesn’t necessarily suggest openness to importing finished products). One state (Iowa) did initially authorize the importation of CBD products from Minnesota’s licensed producers. But the state scuttled that plan (needlessly, I think) after the state AG raised the specter of a federal crackdown. See this post here https://my.vanderbilt.edu/marijuanalaw/2017/09/iowa-officials-urged-not-to-permit-importation-of-cbd-from-minnesota/.

mikosra on June 11th, 2018 at 2:11 pm